If you have been in insurance affiliate marketing for more than 12 months you would have seen a huge influx of big brands names coming into the market paying high levels of commission to affiliates for sales. In the last 3 of those months you would have seen most of them go out again.
Clearly, these big insurance companies either came in at commission level that was not sustainable in the long term or they currently do not see affiliate marketing as a viable marketing spend.
Sadly, my gut is telling me and has been telling me for a while that the former is true. These companies came in to dominate market share. Which affiliate in their right mind is not going to promote something that could earn them £100 per sale.
So up the commissions went from a sustainable £20 to £40 per sale to £70 to £110 per sale.
And don’t forget the affiliate network could take 30% on top so a £100 commission becomes £130. £130 on a car insurance premium of £280! There is certainly not enough margin for a insurer to sustain that model.
As we can see with all the big players pulling out completely, the exercise for them is over. But is this giving affiliate marketing a bad name.
“Well, if all these brands are pulling out, maybe it isn’t working!” some would say!
I think from the industry point of view, insurance affiliate marketing is still a great way to attract business and branding for no cost. The only costs are when a sale is made, so you are totally removed from risk.
There is a caveat here and that is buying leads. Lead affiliate marketing does have its issues so I would advise anyone coming into this space as a new player to think long and hard before coming in on a lead basis.
That said, will any of the smaller players be brave enough to stay. What can the smaller broker do to get into this game? Well, there will be a huge vacuum left by the big players leaving the market,
After all, not all affiliates are PPC based, some have huge networks of sites they need to continue to monetise.
I think the smaller players in the market need to start courting these affiliates. And I don’t think it is a commission thing. At this point, I think affiliates would be happy with some form of longevity from their merchants.
Promoting a sustainable programme should be on the agenda for most affiliates so merchants give them what they need. Some security. Affiliate Marketing is alive and well and now the dust has settled from the mass stampede of the bigger brands leaving the market, it should now return to business as usual.